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Question
Kapil Ltd. purchased a machinery on July 01, 2011 for ₹ 3,50,000. It purchased two additional machines, on April 01, 2012 costing ₹ 1,50,000 and on October 01, 2012 costing ₹ 1,00,000. Depreciation is provided @10% p.a. on straight line basis. On January 01, 2013, first machinery become useless due to technical changes. This machinery was sold for ₹ 1,00,000. Prepare machinery account for 4 years on the basis of calendar year.
Solution
| Dr. | Books of Kapil Ltd Machinery Account |
Cr. | |||||
| Date | Particulars | J.F. | Amount ₹ |
Date | Particulars | J.F. | Amount ₹ |
| 2011 | 2011 | ||||||
| Jul.01 | Bank (i) | 3,50,000 | Dec.31 | Depreciation (6 months) |
17,500 | ||
| Balance c/d | 3,32,500 | ||||||
| 3,50,000 | 3,50,000 | ||||||
| 2012 | 2012 | ||||||
| Jan.01 | Balance c/d | 3,32,500 | Dec.31 | Depreciation (i) 35,000 (ii) 1,250 (9 months) (iii) 2,500 (3 months) |
48,750 | ||
| Apr.01 | Bank (ii) | 1,50,000 | |||||
| Oct.01 | Bank (iii) | 1,00,000 | Dec.31 | Balance c/d (i) 2,97,500 (ii) 1,38,750 (iii) 97,500 |
5,33,750 | ||
| 5,82,500 | 5,82,500 | ||||||
| 2013 | 2013 | ||||||
| Jan.01 | (i) 2,97,500, | Jan.01 | Bank (i) | 1,00,000 | |||
| (ii) 1,38,750, | Jan.01 | Profit and Loss (Loss) |
1,97,500 | ||||
| (iii) 97,500 | 5,33,750 | Dec.31 | Depreciation (ii) 15,000 (iii) 10,000 |
25,000 | |||
| Dec.31 | Balance c/d (ii) 1,23,750 (iii) 87,500 |
2,11,250 | |||||
| 5,33,750 | 5,33,750 | ||||||
| 2014 | 2014 | ||||||
| Jan.01 | Balance c/d (ii) 1,23,750 (iii) 87,500 |
2,11,250 | Dec.31 | Depreciation (ii) 15,000 (iii) 10,000 |
25,000 | ||
| Dec.31 | Balance c/d (ii) 1,08,750 (iii) 77,500 |
1,86,250 | |||||
| 2,11,250 | 2,11,250 | ||||||
| 2015 | |||||||
| Jan.01 | Balance b/d | 1,86,250 | |||||
Notes
Working Note:
Profit or Loss on Sale of Part of Truck:
| Year |
Opening Balance |
Depreciation |
Closing Balance |
|||||
| 2010 - 2011 |
8,00,000 |
– |
60,000 |
= |
7,40,000 |
|||
| 2011 - 2012 |
7,40,000 |
– |
1,11,000 |
= |
6,29,000 |
|||
| 2012 - 2013 |
6,29,000 |
– |
94,350 |
= |
5,34,650 |
|||
| 2013 - 2014 |
5,34,650 |
– |
60,148 |
= |
4,74,502 |
|||
| WDV as on Dec 31, 2013 | 4,74,502 |
| Less: Sales on Dec 31, 2013 | 5,00,000 |
| Profit on sale | 25,498 |
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